Tax Guide for Self-Employed Estate Agents: Commission and Expenses

The Accounted Business Team·20 February 2026·6 min read

Working as a Self-Employed Estate Agent? Here Is How Your Tax Works

The estate agency industry has a mix of employed and self-employed agents. If you work as an independent estate agent — earning commission rather than a salary, working under your own name or through your own business — you are self-employed and responsible for your own tax. This guide covers everything self-employed estate agents need to know for the 2025/26 tax year.

Employed vs Self-Employed: Which Are You?

This distinction matters because it determines how you pay tax. You are likely employed if your agency sets your hours, provides your tools (phone, laptop, car), controls how you work, and pays you a basic salary with commission on top. In this case, your employer deducts tax through PAYE and you may not need to file a Self Assessment return at all (unless your total income exceeds £150,000 or you have other untaxed income).

You are likely self-employed if you work independently, choose your own clients, set your own hours, use your own car and phone, bear your own costs, and are paid purely on commission with no guaranteed salary. Many agents operating as franchisees, independent negotiators, or under self-employed agreements with agencies fall into this category.

If you are unsure, the key test is one of control and financial risk. HMRC's Check Employment Status for Tax (CEST) tool can help, but in borderline cases, it is worth getting professional advice. Getting the status wrong can result in unexpected tax bills for both you and the agency.

Commission as Income

Your commission payments are your gross self-employment income. If you receive commission from multiple sources — different agencies, direct clients, referral fees — add them all together. This is your total income before expenses.

If the agency deducts any fees or costs before paying you, your gross income is the amount before those deductions. You then claim the deductions as expenses.

Keep all commission statements, remittance advices, and invoices you issue to agencies. These are your proof of income.

Expenses You Can Claim

Self-employed estate agents typically have significant expenses. Claiming everything you are entitled to makes a real difference to your tax bill.

Car Costs

Driving is a major part of the job — viewings, valuations, property visits, meetings with clients and solicitors. You have two options:

Simplified mileage rates:

45p per mile for the first 10,000 business miles
25p per mile after that
Covers all running costs including fuel, insurance, repairs, and depreciation

Actual costs:

Fuel, insurance, road tax, MOT, servicing, repairs, tyres, finance interest, depreciation
Claim only the business proportion if you use the car personally too

Most estate agents do considerable mileage. If you drive 20,000 business miles a year, the mileage rate gives you (10,000 x 45p) + (10,000 x 25p) = £4,500 + £2,500 = £7,000 in deductions. That is a significant amount.

Keep a mileage log recording the date, destination, purpose, and miles for each business journey. Driving from home to your office or regular place of work is commuting and does not count. Driving from the office to a property viewing does count. Driving directly from home to a viewing (without going to an office first) also counts if you do not have a fixed office base.

Phone and Communications

Your mobile phone is essential. Claim the business proportion of your contract, or the full cost of a dedicated work phone. If you use a personal phone for business, a 50/50 split is common if you cannot calculate the exact proportion. Landline costs, if applicable, can also be claimed proportionately.

Marketing and Advertising

Self-employed agents often pay for their own marketing:

Business cards and stationery
Leaflet printing and distribution
Online advertising (Google Ads, Facebook Ads, Rightmove or Zoopla listing upgrades if you pay for them)
Website hosting and domain registration
Photography for property listings (if you pay for it yourself)
Branded signage and boards
Social media management tools

All deductible as business expenses.

Professional Memberships and Subscriptions

Propertymark (NAEA) membership
The Property Ombudsman scheme fees
RICS membership (if applicable)
Estate agency software subscriptions
CRM systems
Property portal subscriptions
Professional indemnity insurance

Office Costs

If you rent an office or desk space, the cost is fully deductible. If you work from home, claim a proportion of household costs or use HMRC's simplified flat rates based on hours worked at home.

Clothing

Ordinary business clothing (suits, shoes) is not deductible — HMRC considers these personal items you could wear outside of work. However, branded clothing with your agency logo that you would not wear socially may be deductible. The rules are strict, and HMRC often challenges clothing claims.

Training and CPD

Courses, qualifications, and continuing professional development related to estate agency are deductible. This includes property valuation courses, sales training, and regulatory compliance training. A qualification that enables you to do a new type of work (rather than improving your existing skills) may not be deductible, but in practice most CPD for estate agents qualifies.

Client Entertainment: NOT Deductible

Taking clients to lunch, buying gifts for them, or any form of entertainment is not a deductible expense for tax purposes. HMRC specifically prohibits this. You can still do it, but you cannot reduce your tax bill with it. Hospitality at open houses or launch events falls into the same category unless it is minimal (tea and biscuits at a viewing is fine).

Professional Indemnity Insurance

Compulsory for estate agents and fully deductible.

National Insurance

As a self-employed estate agent, you pay:

Class 2 NI: £3.45 per week if profits exceed £6,725
Class 4 NI: 6% on profits between £12,570 and £50,270, 2% above that

This is in addition to Income Tax.

Payments on Account

If your tax bill exceeds £1,000, HMRC will require payments on account. These are advance payments towards next year's tax bill. You make two payments:

31 January (during the tax year) — 50% of last year's bill
31 July (after the tax year ends) — another 50%

With a balancing payment or refund when you file your return. This catches many newly self-employed agents off guard. In your first year, you could face a tax bill of 150% of one year's liability (the full current year plus 50% advance for next year). Budget for this from the start.

VAT

You must register for VAT if your taxable turnover exceeds £90,000 in a rolling 12-month period. For a successful self-employed estate agent, this is achievable. Once registered, you must charge VAT on your services and submit quarterly returns.

If most of your clients are VAT-registered businesses (commercial property transactions), they can reclaim the VAT you charge, so it has little impact. If your clients are mainly private individuals (residential sales), adding 20% VAT to your fees could make you less competitive compared to agents below the threshold.

Record Keeping

Keep records for at least five years after the 31 January filing deadline:

Commission statements and invoices
Mileage log with dates, destinations, and business miles
Receipts for all expenses
Bank statements
VAT records if registered

Accounted can connect to your bank and categorise your commission income and expenses automatically. Penny flags anything unusual and keeps your records organised throughout the year, so there is no end-of-year scramble.

Start Your Free Trial

Self-employed estate agents have busy, unpredictable schedules. The last thing you need is hours spent on bookkeeping. Accounted is built for people who want simple, accurate records without the admin burden. Start your free trial today and let Penny handle the numbers while you focus on closing deals.

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